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Archived - Supplementary Document to the Department’s 2010-11 Departmental Performance Report (DPR) Regarding Sustainable Development

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In June 2008, the Federal Sustainable Development Act (FSDA) became law, introducing a more centralized approach to sustainable development by requiring the Government to develop and table a Federal Sustainable Development Strategy and update it every three years thereafter.  The first Federal Sustainable Development Strategy was tabled on October 6, 2010. 

To address the interim period between the expiration of the Department of Finance Canada’s 2007-2009 Sustainable Development Strategy (SDS) and the introduction of the Federal SDS, the Department of Finance Canada has developed a revised set of goals, objectives and targeted actions on sustainable development based on the vision set out in the 2007-2009 SDS: “Economic and fiscal policy frameworks and decisions that promote equity and enhance the economic, social and environmental well-being of current and future generations”.

Goal 1:  Fiscal Sustainability and a High Standard of Living for Future Generations
Objectives  Targets for 2010-11 Results Achieved in 2010-11
1a: Promote fiscal sustainability.

1a.1: Implement the stimulus measures contained in Canada’s Economic Action Plan (EAP).

Implement the built-in “exit strategy” of the EAP by ensuring the temporary measures in the plan expire as scheduled by the end of 2010-11, to support the medium-term goal of returning to balanced budgets.

Canada’s EAP was adopted in Budget 2009 as a response to the deepest and most synchronized financial and economic crisis since the Great Depression.

Budget 2011 estimates show that more than $25 billion was delivered through the EAP in support for the recovery in 2010-11.  Overall progress in the implementation of the EAP during the year was presented in the 2010 Update of Economic and Fiscal Projections while progress in implementing individual measures contained in the EAP, as well as the job impacts, was assessed in the Sixth and Seventh Reports to Canadians.

Budget 2010 set out a three-point plan for returning to balanced budgets over the medium term which included winding down the stimulus provided in the EAP as the economy recovers.  The vast majority of the stimulus measures have effectively ended as planned on March 31, 2011, with only a small number of projects receiving an extension through October 31, 2011.  This will help ensure the return to balanced budgets over the medium term.

1b: Keep abreast of long-run economic and fiscal issues and prospects. 1b.1: Understand the economic and fiscal implications of ongoing domestic and global trends. The Department continued to regularly monitor and forecast economic and fiscal performance both in Canada and other countries, conduct private sector surveys of the Canadian economic outlook and assess factors affecting future growth prospects, including productivity and population aging.
1c: Develop and support policies and measures that promote the long-run sustainability of Canada’s economy. 1c.1: Provide analysis and advice to the Minister on possible changes to Canada’s tax system to ensure it supports a competitive and productive economy.

In 2010-11, the Department of Finance provided analysis and advice to support the introduction of tax measures announced in Budget 2011, which included new tax relief measures for individuals, families and businesses.  The work undertaken during this period also supported the Government’s decision to reaffirm its commitment to a low-tax environment that encourages the investment and job creation necessary to increase productivity and improve living standards for Canadians on an ongoing basis.

The new tax relief measures announced in Budget 2011 are in addition to actions taken since 2006 that have established a business tax advantage for Canada that is broad-based, fiscally durable and structurally sound.  As a result of federal and provincial tax changes announced since 2006, in 2013, most business income in Canada will be taxed at a combined federal-provincial rate of 25 per cent.  These tax changes have also allowed Canada to achieve an overall tax rate on new business investment that is substantially lower than that in any other G-7 country. 

In addition, work undertaken during the year led to the announcement in Budget 2011 of measures aimed at improving the fairness and neutrality of Canada’s tax system, including better aligning the deduction rates for intangible costs in the oil sands sector with rates in the conventional oil and gas sector and the closing of tax loopholes. 

The Department, through the Federal-Provincial Committee on Taxation, worked with provinces to achieve common tax policy objectives.

In January 2011, the Department released the 2010 edition of the Tax Expenditures and Evaluations report.  In addition to providing estimates and projections of tax expenditures related to the personal and corporate income taxes and the Goods and Services Tax, the report included two analytical papers entitled “Taxes and the Preferred Source of Corporate Finance” and “The Response of Individuals to Changes in Marginal Income Tax Rates”.

 

Goal 2:  Strong Social Foundations
Objectives  Targets for 2010-11 Results Achieved in 2010-11
2a: Ensure stable and predictable funding for health and social programs. 2a.1:  Provide timely and accurate payment of Canada Health Transfer and Canada Social Transfer amounts and improve overall understanding of the programs.

In 2010-11, the Department continued to focus on providing timely, accurate payments of Canada Health Transfer (CHT) and Canada Social Transfer (CST) amounts to provinces and territories. 

In addition to growing support for the CHT and CST, $525 million was provided through one-time payments to ensure provinces are protected from any decline in their total transfers (CHT, CST and Equalization) in 2010‑11 in recognition of the short-term challenges being faced by provinces as we emerge from the global recession.

Communications activities, including outreach with the provinces, continued in 2010-11 to improve overall understanding of the programs.

2b: Reduce fiscal disparities through Equalization and Territorial Formula Financing programs. 2b.1:  Address fiscal disparities with timely and accurate payment of Equalization and Territorial Formula Financing transfer amounts and improve overall understanding of the programs.

In 2010-11, the Department continued to focus on providing timely, accurate payments of Equalization amounts to Equalization-receiving provinces and Territorial Formula Financing (TFF) amounts to territories. 

Communications activities, including outreach with the provinces, continued in 2010-11 to improve overall understanding of the programs.

2c: Ensure the sustainability of the retirement income system. 2c.1:  Implementation of proposals recommended by federal, provincial and territorial Ministers of Finance, as part of their 2007-2009 Triennial review of the CPP, to modernize the Plan.

Finance Canada officials managed and supported the successful implementation of the Canada Pension Plan (CPP) 2007-2009 Triennial Review changes agreed to by Finance Ministers in May 2009.  These changes to the CPP included measures to better reflect the way Canadians live, work and retire, such as providing greater flexibility for those taking up the retirement benefit before the age of 65 to enable them to combine their CPP benefit with work.

Steps taken in 2010-11 to support implementation included:

  • Creating the new CPP regulations needed to implement the changes arising from the 2007-2009 Triennial Review.
  • Working with provinces to obtain formal provincial consent on legislative and regulatory changes.  (Changes to the CPP require the formal consent through orders in council from two-thirds of the provinces with two-thirds of the population of Canada.)
  • Once formal consent was obtained, Finance Canada officials prepared submissions to the Treasury Board to demonstrate that the required provincial consent had been obtained.  Finance Canada’s Order in Council bringing the CPP changes into effect was published in the Canada Gazette on August 18, 2010 (PDF 1.58 Mb).
  • Working with Human Resources and Skills Development (HRSD) officials to ensure Canadians have access to information on the CPP changes.

The CPP changes were in place as of January 1, 2011.

Finance Canada officials worked with provincial and territorial officials, as well as with other federal departments, to analyze options for ensuring the ongoing strength of Canada’s retirement income system.  This was done through:

  • A national consultation on options for ensuring the ongoing strength of Canada’s retirement income system for which Finance Canada officials prepared the supporting consultations materials.
  • Providing the federal Minister of Finance and other federal Ministers, as well as provincial and territorial Finance Ministers with advice and analysis on options to ensure the ongoing strength of the retirement income system.
  • Following up on the directions of FPT Finance Ministers on options to ensure the ongoing strength of the retirement income system, including preparation of a report with options for a modest enhancement of the CPP.

In addition to the work on CPP, Finance Canada officials have worked with provincial and territorial officials to implemented the commitment from the December 2010 Finance Ministers’ Meeting to introduce Pooled Registered Pension Plans (PRPPs).  These will be defined contribution pension plans that will improve the range of retirement saving options by providing an accessible and low-cost pension plan for individuals who currently do not participate in a private pension plan, such as the self-employed and employees of companies that do not offer a pension plan.

Steps taken in 2010-11 to introduce PRPPs included:

  • Creating a working group of federal, provincial and territorial officials to further develop the PRPP framework.
  • Holding PRPP stakeholder consultation sessions with government officials and industry representatives in Toronto and Ottawa to solicit views on the development of the PRPP policy.
  • Encouraging industry stakeholders to prepare written submissions to further input into the policy development process. 
2c.2:  Begin work on next Canada Pension Plan triennial review (to be completed by 2012).

Finance Canada officials began preparing advice and analysis for federal, provincial and territorial Ministers of Finance on directions for the next 2010-12 CPP Triennial Review.

Finance officials supported federal, provincial and territorial Ministers of Finance by providing advice and analysis on :

  • the financial sustainability of the CPP, based on the 25th Actuarial Report on the CPP, which was tabled on November 15, 2010; and,
  • other changes that may be needed to the CPP, based upon:
    1. direction from FPT Ministers of Finance regarding analytical work on a modest CPP expansion; and,
    2. regular discussions with provinces, territories, and other federal departments and agencies such as HRSD and OSFI.

 

Goal 3: Integrating Sustainable Development Considerations into Policy Making
Objectives  Targets for 2010-11 Results Achieved in 2010-11
3a: Evaluate the potential for the use of economic instruments as a policy tool for addressing environmental issues. 3a.1: Examine potential changes to the tax system to assist the Government in meeting its environmental objectives, including proposals received from responsible policy departments and external stakeholders.

The Department continued to evaluate research and proposals concerning potential environment-related tax measures in consultation with other government departments and stakeholders, including taxpayers, industry associations, and environmental organizations.

Analysis conducted during the year included work supporting the announcement in Budget 2011 of an expansion of the accelerated capital cost allowance (CCA) for clean energy generation equipment under Class 43.2 to include equipment that generates electricity using waste heat.  The Department also conducted analysis supporting the announcement in Budget 2011 of the extension of the qualifying environmental trust rules to pipelines.

The Department performed analysis that lead to the Budget 2011 measure reducing the deduction rates for intangible capital expenses in oil sands projects to align them with the rates in the conventional oil and gas sector.  This measure supports the commitment by G-20 Leaders to rationalize and phase out over the medium term inefficient fossil fuel subsidies.

The Department finalized the legislation implementing the phase-out of accelerated CCA for general investments in oil sands projects announced in Budget 2007.  The Department also finalized the regulations implementing the Budget 2008 and Budget 2010 announcements broadening the eligibility criteria of the CCA Class 43.2.  The Department worked on developing draft legislation to enact the changes to CCA Class 43.2 and the changes to the qualifying environmental trusts rules announced in Budget 2011, which were released with Budget 2011. 

3b: Increased knowledge and awareness of environmental and broader sustainable development issues within the department. 3b.1: Organize at least one speaker annually on an issue related to sustainable development. On September 23, 2010, as part of the Departmental Speakers Series, David Dodge, former Deputy Minister of Finance Canada and Governor of the Bank of Canada, and current Chancellor of Queen's University, delivered a lecture to Finance Canada employees entitled "Health Care Spending: The Issue of Sustainability".  Finance employees also had the opportunity to attend several lectures in 2010-11 on the subject of a sustainable financial system, including the Thomas K. Shoyama Annual Public Policy Lecture.  This year's lecture, entitled "The Next Financial Crisis?”, was delivered by Simon Johnson, Ronald A. Kurtz Professor of Entrepreneurship at MIT's Sloan School of Management.
3b.2: Conduct research and analysis on environmental and natural resource issues. The Department has continued efforts to improve its environmental and natural resource knowledge base by conducting research and analysis on issues such as federal clean air and climate change policy.
3c: Effective implementation of the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals. 3c.1: Organize an information session for Department of Finance employees on undertaking Strategic Environmental Assessments (SEAs). The Department held an information/training session on SEAs in October 2010.  Presentations were given by the Resources, Energy and Environment section, Economic Development and Corporate Finance Branch of Finance Canada and the Canadian Environmental Assessment Agency. 

 

Goal 4: Demonstrating the Department’s Commitment to Sustainable Development in Operations
Objectives  Targets for 2010-11 Results Achieved in 2010-11
4a: Reduced Energy Use. 4a.1: Establish procedures with Public Works and Government Services Canada (PWGSC) on the use of lighting after regular working hours. In consultation with PWGSC, current after hour lighting practices have been reviewed in 2010-2011.  No substantive changes were made, but repairs were completed to ensure lighting on all floors could be controlled centrally.  Previously, lighting could not be turned off on some floors.
4b: Improved solid waste management. 4b.1 Recycling and waste diversion – Maintain a waste diversion rate of at least 75 per cent through the continuation of existing recycling programs and implementation of new or updated programs as appropriate. The Department’s programs are operated by PWGSC.  A waste audit was conducted in February 2009 which indicated a waste diversion rate of 81 per cent.  Opportunities for improvement were noted including expansion of paper towel re-cycling, and increasing paper products diversion from landfill.  PWGSC is planning to conduct a follow-up audit in 2011-2012.
4b.2: Composting programs – Maintain existing composting programs for hand paper towels and pulverized paper. The Department's composting program was operated by PWGSC.  This program was cancelled by PW due to cost and other complications.  Alternatively, the material is now recycled.
4c: Improved environmental performance of departmental vehicles. 4c.1: Monitor the procurement of environmentally responsible executive vehicles for maximum adherence to the TBS Directive on Executive Fleet. Finance Canada acquired one flex-fuel vehicle in 2010-11, which operates on either of two different fuels or a blend of the two (e.g., gasoline alone or a blend of gasoline and ethanol).
4c.2: Maximize use of ethanol-blended fuel whenever possible. Drivers of executive vehicles were encouraged to use ethanol-blended fuel whenever possible.
4c.3: Green and defensive driver training – All drivers will be provided green and defensive driver training. In 2010-11, Finance Canada ensured that all drivers have completed appropriate training.
4d: Green Procurement. 4d.1: Green procurement tracking – Update the Green procurement field to provide specific environmental options for reporting, and train procurement and materiel management personnel on proper usage. Mandatory green procurement indicator fields were implemented in the department’s Integrated Finance and Materiel Management System.
4d.2: Review print and copier device use – Benchmark the staff to device ratios and work towards a ratio of 8:1.

A print optimization study was conducted in Corporate Services Branch on a pilot basis, and pending a review of results, will be expanded to include the rest of the Department in Fall 2011. 

The objectives of the study include:

  • Overall reduction in the ratio of employees to print devices;
  • Identification of cost savings related to paper, device acquisition, supplies and maintenance;
  • Identification of productivity gains for clients and support staff (administration and Help desk efforts). 
4d.3: Green furniture purchases – Incorporate environmental considerations into all furniture purchases. The Department uses PWGSC procurement instruments whenever possible.  These procurement instruments have incorporated environmental considerations in their development.  Purchases made outside of standing offers took into account environmental considerations
4d.4: Green Standing Offers – Maximize the use of PWGSC consolidated green procurement instruments. Procurement officers use mandatory standing offers established by PWGSC for purchases whenever possible.  Furniture and IT equipment is purchased through green procurement instruments whenever possible. 
4d.5: Paper reduction – Establish a paper monitoring and tracking system to effectively reduce paper consumption Work to validate the baseline for paper usage in the department began in 2010-11.  Photocopy paper is supplied from a common warehouse with TBS, and therefore the baseline data gathered requires validation.  The baseline exercise will be completed in 2011-12.

4d.6: Green procurement training – Ensure that proportion of material managers and procurement staff who have received green procurement training remains at 100 per cent by providing green procurement training to all new managers and staff within 8 months of arrival. 

Deliver green procurement training to 70 per cent of acquisition card holders by March 2011. 

In 2010-11, the Department of Finance ensured that 100 per cent of procurement and contracting functional specialists have completed the Green Procurement course offered by the Canada School of Public Service.

In-house information sessions on green procurement were held to ensure that cardholders have a basic understanding and appreciation of green procurement and take into account environmental considerations when making procurement decisions.  To date, approximately 75 per cent of acquisition cardholders have received training.  In addition, a new in-house training session has been developed that will be mandatory for all acquisition cardholders. 

4e: Green citizenship 4e.1: Green Citizenship Network (GCN) – Ensure that membership in the Green Citizenship Network remains at a healthy level, and improve opportunities for employee participation in grassroots environmental activities. The Green Citizenship Network’s (GCN) mandate is to promote environmental stewardship in the workplace and to implement the principles of sustainable development within our corporate culture.  It is a network of environmentally conscious employees from Finance, TBS, and the PSC who work to promote environmental awareness and make a difference in our workplace.  The  2010 Annual General Meeting was held in October to discuss initiatives to be adopted in the coming months
4f: Improved environmental management 4f.1: Establish internal procurement and materiel management processes and controls to integrate environmental performance in procurement and adhere to the TBS Policy on Green Procurement. Work began in 2010-11 to incorporate environmental considerations into business processes and controls.  This includes the inclusion of green procurement checklists for both goods and services procurement.

 

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